‘America First’ policies already taking toll on Mexico

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CANCELED: A man walks past the nearly deserted Ford construction site in Villa de Reyes, Mexico.

Ford President and CEO Mark Fields addresses the Flat Rock Assembly Tuesday, Jan. 3, 2017, in Flat Rock, Mich. Ford is canceling plans to build a new $1.6 billion factory in Mexico and will invest $700 million in a Michigan plant to build new electric and autonomous vehicles. The factory will get 700 new jobs. (AP Photo/Carlos Osorio)

A trailer leaves the construction site carrying away an earth mover, as workers shut down operations a day after Ford announced the cancellation of plans to build a $1.6 billion auto manufacturing plant on the site, in Villa de Reyes, outside San Luis Potosi, Mexico, Wednesday, Jan. 4, 2017. Ford's cancellation, which costs the region thousands of projected jobs, has sounded alarms throughout the country and sent Mexico's currency tumbling by nearly 1%. (AP Photo/Rebecca Blackwell)

Donald Trump’s policy of “buying American and hiring American” is sending shock waves through Mexico — even as it is being applauded north of the border.

A day after Ford Motor Co. announced it was canceling plans to build a $1.6 billion manufacturing plant in San Luis Potosi and would instead create 700 jobs in Michigan, the peso slid again, with the Bank of Mexico’s 48-hour interbank exchange rate weakening from 21.05 to the U.S. dollar to 21.52 at the close.

“This is seen as a sign of things to come,” former Mexico City federal congressman Agustin Barrios Gomez told the Herald yesterday, adding that Trump’s threats to renegotiate the Clinton-era North American Free Trade Agreement are seen as a “betrayal” by the Mexican government. “Mexico followed the lead of the United States when they agreed to go forward with free trade and it reoriented its economy and it bet its economic future on the U.S. being a trading partner and an ally. And it turns out that the United States, 22 years later, would go back on its word.”

But Ford’s abrupt reversal — seen as a reaction to Trump’s vow to punish businesses that move operations abroad — is viewed in the U.S. as a promising sign of things to come.

“This shines the light on the reason that American manufacturers struggle to compete, which I think is a really good thing,” said Christopher P. Geehern of the Associated Industries of Massachusetts. “The things standing in the way of American manufacturers include high business costs and bureaucratic regulations, and what Mr. Trump is doing is sending a warning shot on all of those issues that will hopefully lead to congressional action.”

Retailers of Massachusetts President Jon Hurst said, “The response that we’ve received from our members so far has been very positive.”

Hurst said local business owners are looking forward to benefitting from deregulation and anticipated changes to Obamacare.